An investor should only invest in a financially stable Company, to minimize the risk of losing money while expecting Capital Gain from the investment.

Here are 3 basic tips when choosing shares to invest:

• The market it is operating in

Indonesia economy is driven by domestic market with over 260 million people.

Companies that sell goods or services domestically should provide more stability and are shielded from volatility in international market.

• Current market valuation

Rather than looking at the trend (down or up) of a Company’s share price, an Investor should rather focus on estimating what is the fair value of the Company.

If the PER (Price to Earning Ratio) is < 8; or PBR (Price to Book Ratio) < 1, the Investor can self-estimate whether the fair value should be higher than current share price.

• Future growth

Capital Gain can only be realized if share price increases over time. The increase will be mostly due to growth in the Company.

Hence, it is necessary for an Investor to find out by any means (e.g. company presentations) whether the Company has plan to grow (e.g. increase production volume, additional products, etc).